Patrick Witt challenges 134 banks on CLARITY Act
- White House crypto adviser Patrick Witt criticised 134 banking leaders over proposed changes to the CLARITY Act.
- Banking groups want lawmakers to widen restrictions on stablecoin rewards, while the bill's chances of passing in 2026 have fallen.
- Polymarket traders now give the CLARITY Act a 27% chance of becoming law in 2026.
The CLARITY Act faces renewed debate after White House crypto adviser Patrick Witt criticised 134 banking leaders seeking tighter limits on stablecoin rewards.
The banking groups asked senators to expand restrictions so stablecoin companies could not offer rewards, bonuses or similar incentives to users.
"Banks: We must ban the payment of interest on stablecoins to protect community bank lending!" Witt wrote, adding that the CLARITY Act already prohibits stablecoin issuers from paying interest.
The banking groups said rewards tied to stablecoin balances could encourage customers to move money from insured bank accounts, reducing funds available for lending to households and businesses.
Polymarket traders have lowered the odds of the CLARITY Act becoming law in 2026 to 27%, while Galaxy Digital has reduced its estimate to 30%, reflecting uncertainty over the Senate timetable.
Senate Majority Leader John Thune delayed consideration of the bill while lawmakers focused on federal nominees and sanctions legislation, leaving fewer days before the Aug. 8 recess.
The latest Senate draft would give the Commodity Futures Trading Commission oversight of digital commodity spot markets, while the Securities and Exchange Commission would continue regulating investment contract assets.
